Monarch Airlines is confident it will secure fresh financing as it battles to renew crucial licence

Monarch Airlines is confident it will secure fresh financing and so secure its crucial operating licence within the next 12 days.

The airline’s existing Air Travel Organiser’s Licence (ATOL) was due to expire at midnight on Friday after the company was forced to deny speculation that it was in financial trouble. But the group won an extension from the Civil Aviation Authority giving it until October 12 to meet the requirements.

The licence guarantees holidaymakers booking with an ATOL-holding company protection if an airline goes bust.

Confident: But in order to retain its licence, Monarch must show that it has enough funds to operate for a further three months

It ensures they can continue their holidays if abroad and that they will not be left stranded.

In order to retain its licence, Monarch must show that it has enough funds to operate for a further three months.

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It is thought finance could come from a source other than the existing owners with China’s HNA Group, which owns Hainan Airlines, thought to be considering an investment. Monarch is 90 per cent owned by private equity firm Greybull Capital.

Monarch has said it is trading well and expects to announce that it has made a £40 million profit at the end of its financial year this month.